Budget 2019 Speech

The following is the text used in the City of St. John's budget speech for the 2019 budget.

As you know, my primary focus since being elected in 2013 has been to develop and strengthen City Hall’s approach to public engagement. And like all of us around the table here today, I am also committed to achieving a high level of operational excellence and fiscal responsibility on behalf of our residents.

With that in mind, I’m very proud to present our next three-year budget plan for 2019 to 2021, with a detailed overview of our budget for 2019. It comes after the most extensive and robust consultation process in the city’s history, and is on the heels of significant internal review and improvements to the way City Hall operates and serves the public.

The City began gathering data and feedback almost a year ago to inform both a new strategic plan, which will be released early in the new year, and the budget for the next three years. At the start of the engagement process, we committed to involving as many people as possible in the engagement process earlier than ever before.

I would like to take a moment to remind Council and residents of the process to date.

In March, we conducted the City’s first statistically valid Citizen Satisfaction Survey. A total of 502 surveys were completed, and we learned that 78 percent of residents rate their quality of life as 7 out of ten or higher; 70 percent of residents are satisfied overall with service; and 56 percent perceive a high value for tax dollar.

What did that tell us in terms of preparing for the upcoming budget planning process?

While it is good to note that residents are generally happy with their quality of life in the City and that most residents are satisfied with the services we provide, we also note that there is still room for improvement.

Clearly, residents question the value they are receiving for their tax dollar. As a Council, we took that message to heart and have endeavored over the past six months to better demonstrate our commitment to operating an efficient and effective organization.

We entered into this budget planning period in the spirit of openness, transparency and accountability. More than in any period previously, Council has worked diligently to make our budget deliberations as public as possible.

For the first time in the City’s history, we released an overview of our proposed plan in September via direct mail to every household in St. John’s. I personally conducted numerous media interviews, as I know you did as well, Your Worship, and all members of Council were open to discussing the decision-making process on their social media feeds, in person and in the media.

Public discussion about the budget plan has been both lively and informative.

Online, our engagestjohns.ca website had over 1500 visitors, with over 1360 contributions to the discussion. In person, 110 people attended our 5 budget engagement sessions. We also engaged directly with the Seniors Advisory Committee, the Vibrant Communities group, and the City Business Roundtable, as well as other internal committees and working groups; convened a Strategy and Budget Advisory Committee; responded to dozens of emails and answered calls to 311; conducted two Facebook live events with 91 comments received; and even meet with over 300 residents about tax discounts for households on unserviced lots.

The feedback received through this robust engagement process was carefully reviewed and fully considered as part of preparing for this announcement today. It will continue to be used to influence important policies and long term plans in the months and years to come.

Whether or not residents would be accepting of reductions in service delivery was a serious consideration for this Council, and it was interesting to hear the diverse opinions on this topic in the public.

One small story from our public engagement sessions, Your Worship, showed us first-hand the main challenge with service reductions when one member of the public suggested that we do away with our bulk garbage service. In her opinion, it was not a well-utilized or valued service. Sitting next to her was another woman who said, “I don’t care what you do, but don’t you touch my bulk garbage pick-up!”

And that is just one of hundreds of services we provide to residents, each of whom has unique needs and expectations.

We also heard perspectives from younger residents that often differed from their older counterparts. While retirees often asked for reduced taxes above all else, younger people often said we shouldn’t just take the approach of cutting services to reduce costs. They want a city that is modernizing and has amenities that enable them to maintain a healthy lifestyle and perhaps raise a family. In other words, services we would likely cut would impact their decision to stay here.

My point, Your Worship, is that our budget engagement made it clear that we a need to strike a balance. While we did hear calls for reduced taxes, we also heard many calls for enhanced investment in services like winter maintenance; amenities like recreation infrastructure; and initiatives to stimulate the economy.

As you know, this Council envisions a City where people want to live and work; a progressive city, shaped by its geography and history, with valued programs and services for the betterment of the entire community.

To ensure that we meet the needs of our entire community, Budget 2019 anticipates no reduction in services to the residents of St. John’s.

Given 2019 is first year in a new assessment cycle, a key challenge we faced during our planning phase was an unknown: how much revenue would the City receive through taxation?

Due to a number of factors -- which we outlined in detail in our September mailout, in stories on our website and in the media, through social media and in discussions with residents online and in person – property values were expected to decline in the new assessment period. This prediction has, generally speaking, been accurate and is reflective of a trend seen across the province.

Residential property values are down slightly overall, with the total residential roll dropping by 4.17 percent. Commercial properties, on the other hand, are up slightly by 1.72 percent, but total municipal property values have decreased from $15.9 billion in 2018 to $15.5 billion for 2019.

This would mean a shortfall in revenue if we maintain the existing mill rate. This fact, combined with other unavoidable cost increases including rising electricity rates and debt servicing charges, result in the need to increase mill rates for 2019.

Expenditures for the 2019 year are budgeted at $304,677,022, up 2.4 percent from 2018 – a marginal increase relative to the size of the City’s budget, but an increase nonetheless.

To present a balanced budget for 2019, the mill rate for residential owners will be set at 7.7, up .4 from the 2018 mill rate; commercial property tax will be based on a mill rate of 26.1, up 1.4 from 2018; and water taxes will increase by $25, from $580 in 2018 to $605 in 2019.

Property tax is a very individual thing, Your Worship, with the amount of tax you pay being tied directly to your assessed property value. However, it is good to note that, despite this increase in the mill rate, 4 of every 5 property owners will see an increase of less than $10 a month; and almost one third of residential property owners will see no increase or in fact a drop in their taxes in 2019.

We acknowledge that, for some, any increase in property tax will be a burden and we pledge to work with you to the best of our ability to ease that burden. The appeal process for property owners is still open for residents and businesses who have questions or concerns about their assessments; our discount to qualified seniors will continue; and we pledge to keep costs down for our programs and services. Metrobus fares, for example, remain unchanged in 2019.

A number of factors are driving costs for 2019:

Maintaining our city's infrastructure is key for the effective movement of people and goods through our city. Much of our infrastructure work is funded through cost-shared capital projects, and this year we have a projected increase of $3.3 million in debt servicing payments to cover our share of these projects.

In the past few years, the City has been able to take advance of a number of cost-shared capital projects, from road and sewer work to the construction of facilities including the Kenmount Terrace Community Centre, which reduce the City’s portion of construction by half or more.

Electricity costs are projected to rise by $696,000 in 2019. We had initially projected a higher increase for the cost of electricity but have carefully reviewed our budget plan and reduced to what we believe is a reasonable projection for the coming year.

Payroll costs will increase $3 million in 2019. We are keeping our staffing costs down by minimizing new hires; in 2019, we have a net increase of 7.94 full time equivalents – most of whom are staff hired to support the new Kenmount Terrace Community Centre and to support investment in information technology.

As you’re aware, Your Worship, earlier this year Council announced a freeze on management wages for this budget cycle. With that said, some employees will receive step increases as part of their contracts, and employees at Metrobus and the St. John’s Regional Fire Department will receive previously negotiated increases in 2019. Finally, adjustments have been made to accurately reflect the full costs associated with payroll for some of our casual and part-time employees.

Accuracy in budgeting is critically important, especially as the organization increases its efficiency.

The 2019 grant to St. John’s Sports and Entertainment better reflects recent actuals as well as investments in sales and marketing for the Convention Centre and actual revenue at Mile One.

In truth, our support to Mile One Centre and the St. John’s Convention Centre are investments in the economy: both these facilities generate economic benefit for the City and represent an excellent investment in stimulating activity in the downtown.

Realignments in our Community Services Department have allowed us to further invest in economic development by repurposing our seasonal Tourist Information Centre on Water Street into a year-round Welcome Centre, serving the business community and new Canadians as well as the tourist sector. We have also hired a new Economic Development Officer, with existing funds, and will be supporting Destination St. John’s with a $50,000 grant to hire tourism marketing expertise.

And we are working collaboratively with partners such as the Board of Trade and Downtown St. John’s to offer programs, services and promotions that encourage business growth and success.

On the topic of development, Your Worship, as you know the City charges development fees whenever new development is approved. Those fees help pay for new public parks and open spaces and the upgrading of existing parks. As such, they are an important source of revenue.

However, development fees can also be used creatively to help focus or encourage development in certain areas. The City’s Envision St. John’s Municipal Plan sets out eight (8) intensification areas, where there is potential for redevelopment with a mix of land uses – residential, commercial and institutional. These areas are located on main roads, serviced by public transit, and near existing commercial services and schools.

As a way to encourage development in these intensification areas, I am pleased to announce that Council has decided to waive the development fees where developers propose comprehensive plans for redevelopment. We must also begin to measure the price of sprawl and consider better aligning development fees with the impact that projects can have on the surrounding community.

Cities are more than bricks and mortar, and we want St. John’s to be a connected community where residents have a sense of belonging and are actively engaged in community life. As a municipality, we have a responsibility to offer programs and services that help to fill the gaps for people who need help in achieving those connections. The truth is, many in our city cannot afford to pay for private health and wellness opportunities.

Our recreation services promote those connections and we are proud to offer responsive programming that meets the needs of our neighborhoods and residents.

In 2019, we begin operations of a new and long-awaited community centre in Kenmount Terrace, offering access to programs and services that will benefit not only the direct neighbourhood but the entire region.

For example, we are investing in improving our summer program at Spruce Meadows Park / MacDonald Drive to ensure we are better able to meet inclusion needs in all our year-round recreation programs.

We continue to invest in healthy cities and to do the things that enhance quality of life – from launching a new ten-year Affordable Housing Strategy to developing neighbourhood profiles and offering interactive online tools to help newcomers navigate our communities. I am pleased to note, Your Worship, that we will continue to support the housing catalyst fund for practical and collaborative projects that produce tangible housing solutions for people, valued at $50,000.

Through all of this, the City will work aggressively to find ways to operate more efficiently. Council is committed to keeping our human resources costs under control; to aggressively address the problem of rising power rates; and to focus on stability through partnerships with community and government organizations.

Earlier this year, we announced our decision to utilize previous surpluses to help address our debt, reducing our annual pension funding requirement by $1.59 million. And contributions to the Torbay Road North Reserve Capital Fund – projected to be $11M by the end of 2018 - have been eliminated, resulting in a net reduction in capital spending of $1.8M per year.

We are always looking at ways to reduce costs, and I’m pleased to announce that new contracts within our City buildings division for snow clearing and ice control of some City parking lots have resulted in $285,000 in savings for 2019; a new cellular service contract reduces our costs by $150,000; and a move to VOIP – voice-over internet protocol -- technology will yield further savings. The elimination of staff car allowances saved $295,000 from the bottom line.

We commit to developing a culture at City Hall that continuously seeks out ways to operate more efficiently and effectively, and this commitment is now formalized in a continuous improvement program.

By using LEAN continuous improvement approaches and techniques, our staff are already improving the way we operate and identify potential savings. We now have 9 LEAN Green Belt certified employees, with two more in progress and plans to grow our team in the next fiscal year. Projects already completed are having a direct impact on the way we do business both internally and externally for residents, businesses, and anyone who deals with City Hall.

For example, Your Worship, I was thrilled to see immediate results in the intake step (in the Access Centre) for building permits for residential new construction and renovations: staff made process changes that led to a reduction in waiting time from 6 days down to 1 or at most, 2. We have two more projects underway in the permits area which will see a further improvement in turnaround time. We have just scratched the surface on improvements in the permitting process, but these early results show what can be and is possible.

On a separate note, I am also pleased to announce that we are investing an additional $150,000 to improve the efficiency and effectiveness of snow clearing operations, particularly addressing sidewalk snow clearing. This issue has been advocated by many on Council and it was a common theme in public engagement discussions and the citizen satisfaction survey.

As a council, we are also deeply committed to reviewing and improving our public transportation system and we all look forward to the results of the ongoing transit review. We believe that St. John’s must have sustainable transportation networks that get people and goods where they need and want to go, safely and efficiently.

Progress is already being made on the public transportation front, and our commission members are making efforts to increase ridership levels through several means. While it is difficult to identify the direct cause at this early stage, I am pleased to note that in 2018 Metrobus saw a 3% increase in ridership.

Every decision the City makes impacts sustainability, today and into the future. By focusing on policy and strategy that supports a vision for a strong economy, values the environment we live in, supports progressive land use planning, and clearly demonstrates value for money to residents, St. John’s will be an affordable and sustainable place to live and do business.

To that end, I am very pleased to announce our commitment, over the next three years, to developing and implementing not only a new Strategic Plan, but also new plans for economic development in a new Economic Roadmap. We will also develop a Sustainability Plan, which will consider energy efficiency, protection of our wetlands and trees, and density and the cost of urban sprawl, among other topics. These efforts will help us develop reliable fiscal sustainability and a robust response to climate change.

We will also work closely with our employees and unions, re-entering negotiations in this fiscal year, and working collaboratively on quality work life issues, from supporting a respectful workplace to operating with safety and wellness as key pillars of success.

We commit to residents, businesses and property owners our promise to manage your tax dollars as effectively and efficiently as possible. Recognizing that costs will continue to rise over the next two years of this three-year plan and we must work diligently to ensure that any increases in tax are minimized and services are maintained.

Our goal, as always, will be to provide high quality services and valuable programs in a fiscally responsible manner.

And with that, I present the 2019 budget and 2019-2021 budget plan for approval.

Written by Dave Lane at 08:19
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